Practice Areas

$3.8 Million Civil Penalty for Distributing and Selling Recalled Products

Thursday, October 06, 2016

Sandler, Travis & Rosenberg Trade Report

The Consumer Product Safety Commission announced Oct. 3 that a U.S. company has agreed to pay a $3.8 million civil penalty to settle charges that it knowingly sold and distributed 16 recalled consumer products from 2010 to 2015 in violation of federal law. The company has also agreed to maintain a program designed to ensure compliance with the Consumer Product Safety Act, including a program for the appropriate disposal of recalled products, and a system of internal controls and procedures.

According to an agency press release, CPSC staff charged that the company failed to implement adequate procedures to accurately identify, quarantine, and prevent the sales of the recalled products across all of its supply channels. Staff also charged that in some cases the company failed to permanently block product codes due to inaccurate information signaling that the recalled product was not in inventory and that at other times the blocked codes were reactivated prematurely or overridden. The press release notes that sales of recalled products continued even after the company told the CPSC that it had put measures into place to reduce the risk of sales of recalled products.

The settlement agreement has been provisionally accepted by the CPSC by a 4-1 vote. Any interested person may ask the CPSC not to accept it or otherwise comment on its contents by filing a written request no later than Oct. 20.